04/20/2012 04:24 pm ET Updated Apr 21, 2012

Illinois Pension Reform: Gov. Pat Quinn Urges Delayed Retirement, Upped Worker Contributions (VIDEO)

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Illinois Gov. Pat Quinn on Friday introduced his plan to address the state's growing pension crisis by cutting costs and -- the governor proposed -- delaying state workers' retirement age.

The Chicago Tribune reports that the Democratic governor said Friday that Illinois's pension problem is "one of the most difficult problems that Illinois government has faced for more than three decades." In order to solve it, he believes state workers should contribute 3 percent more to their retirement plans and not retire until they turn 67 in a plan that would be phased in over the coming years.

The plan, the governor claims, would save the state between $65 billion and $85 billion by 2045.

The governor's plan also, the Chicago Sun-Times notes, includes a 3 percent cut to cost-of-living adjustments. And if state workers don't like it, they can opt, instead, for the current plan, with the caveat that they would lose their retirement health coverage. The governor reportedly expects about one-quarter of state workers to take that route.

"This plan rescues our pension system and allows public employees who have faithfully contributed to the system to continue to receive pension benefits. I urge the General Assembly to move forward with this plan, which will bring a new era of fiscal responsibility and stability to Illinois," Quinn said in a statement, reported by CBS Chicago.

Illinois Republican leaders applauded the governor's pension reform plan.

"We’re glad the administration and the Democrats have finally got religion," Senate Minority Leader Christine Radogno said of how she and House Minority Leader Tom Cross felt about the plan, the Sun-Times reports.

Still Cross and other state Republican lawmakers do have reservations. Cross told the AP he as leery of Quinn's call for school districts and colleges to contribute to their employees' retirements.

"To me, that is a tax increase," the Oswego Republican said.

A coalition of labor unions representing impacted state workers were not pleased by the governor's plan.

"We believe the proposals are insensitive and irresponsible," AFL-CIO president Michael Carrigan said in a statement to the State Journal-Register. "By appearing to endorse these unfair and unconstitutional cuts, the governor has made the process of finding common ground much more difficult."

When the governor last spoke at length about the state's financial health -- in his February budget address -- he received harsh criticism from some -- Republicans and Democrats alike -- who felt he offered little to no answers when it came to how the state can tackle pension reform, despite the fact that it is one of the state's biggest obstacles to improving its financial outlook.

“All this stuff we’re doing in getting rid of … closing prisons and closing mental health facilities, that doesn’t do a thing to fix it. It has got to be dealt with in the state public pension side," Republican State Treasurer Dan Rutherford said in February.

Pensions will cost the state an estimated $5.2 million in the coming fiscal year. A report released earlier this month found that Cook County pension funds aren't in much better shape than the state itself -- according to the report, the county's pension funds are slated to dry up in 26 years unless changes are made to the program.